Global Cryptocurrency Market Suffers Major Decline Following Bybit Hack
February 22, 2025 – The global cryptocurrency market has experienced a significant downturn, losing approximately $200 billion in market value within a week, as highlighted by Nairametrics and reported on News.Az.
The total market value decreased from $3.37 trillion to $3.17 trillion, marking a 5.93% decline. Major cryptocurrencies have not been spared, with Bitcoin (BTC) and Ethereum (ETH) both witnessing considerable price drops in recent trading sessions.
Bitcoin and Ethereum Face Price Challenges
Currently, Bitcoin is trading at $96,566, which represents a 1.11% loss over the past week and an 11.26% drop from its all-time high of $108,786, set on January 20, 2025. Ethereum has fared even worse, with its price falling to $2,734.24, down 15.5% over the week and a staggering 43.95% from its peak value of $4,878.26. The bearish trend has also impacted other leading altcoins, including Binance Coin (BNB), which recorded notable losses alongside the market’s general decline.
Bybit Security Breach Spooks Investors
A significant factor contributing to this market downturn is a major security breach at cryptocurrency exchange Bybit, which occurred on February 21. In what has been described as the largest theft in cryptocurrency history, hackers stole 401,346 ETH, valued at around $1.4 billion. This event triggered widespread panic selling, leading to millions in liquidated positions across the market. According to data gathered from Coinglass, over $544 million in open positions were liquidated within just 24 hours, further destabilizing the already troubled market.
Current Market Overview
Despite the overall downturn, Bitcoin maintains a strong market dominance, currently valued at $1.91 trillion and representing 60.1% of the total cryptocurrency market. Ethereum follows with a market cap of $330.22 billion, accounting for 10.3%. Additionally, stablecoins such as USDT, USDC, and TUSD together hold $214.51 billion, which is approximately 7% of the market, while other cryptocurrencies comprise the remaining $727.95 billion, or 23%.
Interestingly, amidst the losses, a few cryptocurrencies have managed to post impressive gains, exceeding 50% within the same week. The top gainers include:
- Story (IP): +166.80%
- Sonic (S, previously FTM): +62.10%
- Maker (MKR): +52.40%
Conversely, some cryptocurrencies have experienced steep declines. The top losers are:
- Raydium (RAY): -15.8%
- Official Trump (TRUMP): -14.46%
- Jupiter (JUP): -12.51%
These trends are based on an analysis of the top 100 cryptocurrencies from CoinMarketCap.
Market Sentiment Shifts Toward Fear
The Market Fear and Greed Index has notably declined from 41 to 38 this week, signaling a shift from a sentiment of greed to one of fear. This decrease demonstrates growing uncertainty among investors, leading to a more cautious approach in their trading activities.
Interestingly, Bitcoin’s dominance has slightly increased to 60%, up from 59.7% the previous week. This suggests that some investors may be seeking refuge in Bitcoin as a perceived safe haven in the current turbulent market.
Potential Cybersecurity Connections
The Bybit hack has drawn attention beyond the immediate financial implications, with blockchain analytics firm Arkham attributing the attack to the Lazarus Group, a North Korean cybercriminal organization known for its history of targeting cryptocurrency firms. Reports indicate that the hackers attempted to transfer the stolen ETH to ChainFlip to convert it into Bitcoin. In response to this security threat, ChainFlip has proactively disabled specific front-end services to mitigate the movement of the stolen funds.
Conclusion
As the cryptocurrency market grapples with these recent challenges, investors are left to navigate a landscape fraught with uncertainty and fear. The ramifications of the Bybit security breach continue to influence trading strategies and investor sentiment, highlighting the need for heightened security measures within the digital asset space.
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